Buyer's Market; Why aren't people buying homes?

[leonard]

Originally Posted by B Wagner

I was reading BullDawgFan’s comment and actually people, no matter when it is, will always have to move due to relocation, divorce, loss of job, downsizing, foreclosure, etc. so houses will always be for sale. There are a lot of people who have lived in their homes for years and actually have equity and can take the 10% loss in their sale of their home, but to buy, there are some great buys right now. What is the big deal if you lose 10K on your home sale when you buy a bigger home with 20, 30 or 50K worth of equity upfront in your purchase?

In general the homes you see selling fit the description that you give above. People who relocate or want to move "up".

The other group is investors.

The first group, even in Georgia, is limited in number and cannot absorb all the homes on the market.

The investors will use theirs for rentals, and I am sure around Atlanta they will do well, as in other metropolitan areas.

The biggest group will be those who are 1st time home buyers and they can't buy easily right now. They are right on the edge of doing OK, but fear for their jobs.

The other thing that makes potential out of State residents fear moving, is the increase in crime and the deterioration of living standards. Just read a few posts here about the communities where people currently live in GA. It has me concerned enough that GA just slid to second choice behind TN, for me.

I am considering a move to TN or GA, but will wait to see how the next 60 days go. I "hope" that a lot of the problem is manipulation by politicians setting up our President elect to be a "savior" of the economy, after driving us nuts with fear about the economy.

The reality is that it may be beyond any remedy and will continue to spiral down and down and down .......

Georgia is not ready for that. Very few States, if any, are.

[B Wagner]

Leonard; Good point. I work with investor’s everyday. I see great opportunities with all the buyers in the market. But what troubles me the most is because of the credit crisis is the availability of of investor loans. Fannie Mae and Freddie Mac have a 4 home limit for investors. Banks have a 10 home limit for investors to be able to purchase homes. I work with people that have dozens of homes and good businesses and are very capable of buying dozens of homes over the next year and renovating them, upgrading neighborhoods and helping with this down market, but are unable to get loans to do what they do for a living. They are basically sitting on the sidelines not able to do anything about what is going on.
When you own 28 houses and 3 commercial properties and have been doing this for 30 years and cannot get a loan to continue what you are great at, there is a problem.
Investors have been stymied over the last year and it doesn’t help that Georgia has been one of the most areas hit by mortgage fraud over the last decade. In a time like these investors, good people with great credit, and they have been helping revitalize so many areas around Atlanta, are out of the game. What a shame and what a waste of time, when the housing market needs them to help out, so many are just sitting by watching. These are the experts who have helped change the landscaping of Atlanta and the metro area for so long, out of the picture.
It is a shame that because of the actions of a very few, the whole area and all the people effected is so large. Just this alone could change the numbers up to 50% of the homes on the market.
People with cash are driving the home buying and they are making a fortune. In a year or two when the market just gets back to normal they will make a fortune in equity alone. I just wish there were more of them.

[Bulldawgfan]

B Wagner,

I was not trying to slam you or your profession in my post. After rereading it I guess it kinda sounded that way. Sorry, that was not my intent. And I cannot speak with any real experience in this matter... I am just kinda spouting off from my observations. Here where I live there seems to be too many empty houses for your statements like

As the need for homes grows

Of the reasons you give

people, no matter when it is, will always have to move due to relocation, divorce, loss of job, downsizing, foreclosure, etc.

only one has the possibility of an upwards move (relocation). That is why I tend to think that, based on consumer confidence, the rental market would be a safer investment right now than home ownership. Which ties back in with investing.The middle class is freaked out. And although I am sure the ideal situation for a real estate broker is to sell big money, upper class dwellings... my guess is that middle class modest homes are the lions share of the business. If the middle class is 'shy', your business is gonna suffer.
Again, no disrespect intended.

[KevK]

Originally Posted by B Wagner

With what is going on in the economy I can understand to an extent, but now is the time to buy a home. It is probably the best time in our lifetime to buy a personal home or start getting involved in investment homes.
The government is adding buyer incentives to help boost the market. Interest rates are as low as we will probably ever see again in our life time, and the market is flooded with homes for the picking, with selling homeowners motivated to sell. The “Perfect Storm” for a buyer.
I can understand people whose jobs are in jeopardy being hesitant, but what about all the people who are losing money in everything from 401K’s to the stock market, why aren’t more investor oriented people being aggressive in their portfolios?
There are a lot of people who this economy has not affected at all so far, but yet they haven’t done anything to help stimulate the economy.
The gloom and doom on the TV and all the talking heads that act like they have expert opinions on what is going on are looking at 4 or 5 markets in the whole USA and saying that everything is terrible. Yes, our economy is taking a big dive and people are cautious about their future investments, but now is the best time in our lifetime to invest in real estate. You have to be smart in what you are doing though. The cycle is down and in a lot of markets are starting on the upswing, but at the very beginning of this up swing.
If you are interested in putting your money into something that can take a quick turn around, I would recommend real estate. I see HUD homes, bank and corporate homes sell for $.50 / $.60 on the dollar, week after week. This is not taking into effect that in about a year or two the market will take a big upturn again and the equity factor will kick in and the investor will make a quick windfall in equity profits. Now is the time to buy if you have the means to do so. Cash is king right now in the market and I see many people racking up equity in homes and will be in great shape in the near future.
If you are waiting on the market the even out you have already missed the bottom and are just beginning to see the rise to the top and it is not too late to take advantage of the market, as it is today. Contact your local REALTOR® and get advice and see what the local trends are in the market. If you wait, you will miss one of the best investment opportunities in our lifetime.
I speak for the markets in the north Georgia area and particularly in the Atlanta metro area. Your particular area is actually subject to the trends in your area. Contact your local REALTOR® for the trends in sales in your area to see what might be in your best interest...Bill

People are buying homes- to live in. Alot of the former home sales in the 90s were driven by speculators who hoped to land bank them and flip them for a huge profit. Now they don't see any future in that.